We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Buy These 3 High-Yield Bond Funds for Solid Returns
Read MoreHide Full Article
High-yield bonds are debt securities issued by corporations that can provide a higher yield than investment-grade bonds but are riskier investments. These corporate bonds represent debt issued by a firm with the promise to pay interest and return the principal on maturity. Junk bonds are issued by companies with poorer credit quality.
They carry lower credit ratings from the leading credit agencies, usually Ba1 or lower by Moody's, or BB+ or lower by Standard & Poor's or Fitch. These bonds have significant holdings in smaller companies, which are considered to have a weaker financial condition but benefit as the economy moves north. Though high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return.
Manning & Napier High Yield Bond invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments. The fund has returned 6.2% over the past three years.
As of September 2024, MNHYX had 19.4% of its assets invested in Total Misc Bonds.
Fidelity Series Floating Rate High Income invests mainly in floating rate loans, which are often lower-quality debt securities and other floating rate securities. FFHCX invests part of its assets in the money market, investment-grade debt securities and repurchase agreements. The fund has returned 7.8% over the past three years.
Chandler Perine has been one of the fund managers of FFHCX since September 2022.
American Funds American High-Income invests primarily in higher-yielding and lower-quality debt securities. AHIFX also invests part of its assets in securities of issuers domiciled outside the United States. The fund has returned 5.5% over the past three years.
Image: Bigstock
Buy These 3 High-Yield Bond Funds for Solid Returns
High-yield bonds are debt securities issued by corporations that can provide a higher yield than investment-grade bonds but are riskier investments. These corporate bonds represent debt issued by a firm with the promise to pay interest and return the principal on maturity. Junk bonds are issued by companies with poorer credit quality.
They carry lower credit ratings from the leading credit agencies, usually Ba1 or lower by Moody's, or BB+ or lower by Standard & Poor's or Fitch. These bonds have significant holdings in smaller companies, which are considered to have a weaker financial condition but benefit as the economy moves north. Though high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return.
Below, we share with you three top-ranked high-yield bond mutual funds — Manning & Napier High Yield Bond (MNHYX - Free Report) , Fidelity Series Floating Rate High Income (FFHCX - Free Report) and American Funds American High-Income (AHIFX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Manning & Napier High Yield Bond invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments. The fund has returned 6.2% over the past three years.
As of September 2024, MNHYX had 19.4% of its assets invested in Total Misc Bonds.
Fidelity Series Floating Rate High Income invests mainly in floating rate loans, which are often lower-quality debt securities and other floating rate securities. FFHCX invests part of its assets in the money market, investment-grade debt securities and repurchase agreements. The fund has returned 7.8% over the past three years.
Chandler Perine has been one of the fund managers of FFHCX since September 2022.
American Funds American High-Income invests primarily in higher-yielding and lower-quality debt securities. AHIFX also invests part of its assets in securities of issuers domiciled outside the United States. The fund has returned 5.5% over the past three years.
AHIFX has an expense ratio of 0.43%.
To view the Zacks Rank and the past performance of all high-yield bond funds, investors can click here to see the complete list of high-yield bond funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>